Question 1: Do the HCRA surcharges and assessments apply to out of state payors?

Answer 1: Third party payors, as defined in PHL §2807-j, regardless of their state or country domicile, must make a decision whether to elect, and pay their surcharge obligations on surchargeable claims directly to the Public Goods Pool, at a reduced percentage rate, or not elect, and pay a substantially higher surcharge percentage rate to the provider of service when billed. In addition, certain payors, whose policy provides inpatient coverage on an expense incurred basis, would be obligated to either a covered lives assessment on insureds residing in NYS, if an electing payor with the Public Goods Pool, or, a regional GME percentage surcharge when being billed for an inpatient claim, if a non-elector.

Answer 2: For dates of service prior to April 1, 2012, payments made to HCRA designated providers by governmental agencies from other states, including out-of-state Medicaid programs, were fully subject to the HCRA surcharges at rates based on their election status. For dates of service April 1, 2012 and forward, out-of-state Medicaid programs are considered Unspecified Payors, and subject to the Unspecified Payor/Self-Pay surcharge rate, when billed by the provider, but no covered lives or regional GME percentage surcharge. Providers are to ignore the Elector List with regards to electing states and their Medicaid program and assess the Unspecified Payor/Self-Pay surcharge rate on all bills to the out-of-state Medicaid program.

Please note, out-of-state governmental programs with inpatient coverage are not obligated to a covered lives assessment (if an elector) or the regional GME percentage (if a non-elector) unless the program is making payments to providers in its role as an employer for its employees. In this instance, the out-of-state governmental program would have a covered lives obligation for those insured whose primary insured's legal residence is within New York State, or, would have a regional GME percentage obligation if a non-elector, when billed.

Other out-of-state governmental programs are not affected by this April 1, 2012 decision, and must make an election in order to be obligated to the reduced surcharge percentage.

Answer 3: Payments to designated providers made by payors providing coverage pursuant to any states workers' compensation law, or auto no-fault law are subject to the HCRA surcharge at rates based on the payor´s election status, but no regional GME percentage or covered lives assessment obligation.

Question 4: Do the HCRA surcharges apply to revenue received by designated providers for medical services provided to diplomatic agents?

Answer 4: No. Under the provisions of Article 34 of the Vienna Convention, 23 U.S.T.3242, diplomatic agents shall be exempt from all taxes, whether national, regional, or municipal. The Supremacy Clause of the US CONST., Article VI, Clause 2, provides that treaties entered into by the United States are the "Law of Land" to which state law must yield. Consequently, the Department has elected not to contest assertions of exemption from HCRA surcharges made by foreign diplomatic missions covered by the Vienna Convention which are self-insured for purposes of providing health insurance coverage to their employees. Additionally, any payments made by the foreign diplomatic agent themselves to designated providers of services for their portion due, (percentage coinsurance amount, deductible or uncovered services) will also have no surcharge obligation, or regional GME percentage.

This exemption should not be construed as one which exempts the payor of health care benefits for all foreign national or foreign governmental employees from paying surcharges. Further, this exemption would not extend to those situations where a foreign government has elected to provide health insurance coverage to its diplomatic agents through a health plan purchased from a private insurance carrier. In these situations, responsibility for payment of the HCRA surcharge rests with the private insurance carrier, at rates based on their election status, plus if applicable, a regional GME percentage, when billed.

Question 5: How do the HCRA surcharges apply to foreign governmental agencies?

Answer 5: Payments to designated HCRA providers made directly by foreign governmental agencies are considered "unspecified payors" or payors under the HCRA. As such, revenue received by designated providers from them is subject to the Self-Pay/Unspecified surcharge rate and no regional GME percentage or covered lives assessment.

Question 6: How do the HCRA surcharges apply to foreign countries with nationalized healthcare systems?

Answer 6: Payments to designated HCRA providers made directly by the foreign country´s nationalized healthcare systems are considered "unspecified" payors under the HCRA. As such, revenue received by designated providers from them is subject to the Self-Pay/Unspecified surcharge rate and no regional GME percentage or covered lives assessment.

Answer 7: Private foreign insurers and foreign self funded plans have the same election decision to make as domestic insurers and self funded plans. If they elect into the Public Goods Pool, their surcharge obligation is the same as the Self-Pay/Unspecified percentage rate, payable directly to the Public Goods Pool, plus, if applicable, a covered lives assessment per diem. If they don't elect, they will be obligated to the higher surcharge percentage, and if applicable, a regional GME percentage on inpatient hospital services, when billed.